Senate Bill 88 could save the State approximately $8.8 million in Medicaid funds

JUNEAU-This week, the Alaska State Legislature unanimously passed a bill aimed at saving the state millions in Medicaid funding while providing better medical care for thousands of Alaskans. Senate Bill 88, sponsored by the Senate Finance Committee, authorizes the Department of Administration to enter into a lease purchase agreement with the Alaska Native Tribal Health Consortium (ANTHC) to build a residential housing facility on the Alaska Native Medical Center (ANMC) in Anchorage.

Senate Bill 88 addresses the critical need for patient housing by authorizing $35 million in State Revenue bonds to build a 170-bed residential housing facility with sky bridge access to ANMC. The project grew out of an effort started two years ago when ANTHC and the Department of Health and Social Services began identifying ways in which working together could result in Medicaid cost savings for the State. One method they identified was making sure Alaska Natives have better access to tribal facilities, which are fully federally funded.

“Improving access to care for the people we serve has been the ANTHC Board's highest priority. Patient housing is critical to ensuring meaningful access to care for pregnant moms, for those who are receiving cancer treatment, and for those who must receive care far away from their home communities,” said Valerie Davidson, ANTHC Senior Director of Legal & Intergovernmental Affairs. “We applaud the Senate Finance Committee's leadership and thank the Legislature for their unanimous support of this bill. This partnership with Commissioner Streur and Deputy Commissioner Rodell allows us to break ground this summer and provide a home away from home for people who must travel to Anchorage for critical health services.”

The savings would be achieved because more patients would be able to go ANMC, instead going to Alaska Regional Hospital or Providence Medical Center. While both hospitals are excellent facilities, they aren’t eligible for the 100-percent federal funding that ANMC is. Therefore, the State has to pick up 50-percent of the Medicaid tab, which is currently costing millions every year. Building the residential facility along with ANMC’s plans to increase services in several key areas will result in a 30-percent increase of Alaska Native services that would be able to receive care at ANMC.

“As Co-Chair of Finance, when I have to construct a budget for the state, one of the first questions I ask is what’s the Medicaid hit this year,” said Senator Pete Kelly, R-Fairbanks. “It’s always a big number and we have to reduce from other areas to accommodate it. This project should actually save us money- about $8 million per year is a conservative estimate. It will not only provide a health benefit for Alaskans, but will save us money as well.”

For example, in FY2012, the State paid Providence and Alaska Regional almost $30 million to receive care that could’ve been provided at ANMC. In addition to actual medical costs, Medicaid also picks up other costs associated with travel including: hotels, food, taxi rides, and plane travel. The new facility will help reduce those costs as well.

“One of the most critical components of medical recovery is a strong support system including strong cultural values,” said Senator Kevin Meyer. “This bill creates more of a community atmosphere by keeping families together during this critical period. It also brings cultural values into the recovery process because it allows Native foods to be served and offers other programs that provide strong ties to home.”